What’s Minted in Berkshire County Stays There: Finding Reward in Local Currency

September 5, 2013 at 12:00 AM EDT

563624802848028What's Minted in Berkshire County Stays ThereBerkshire County in Massachusetts has taken "buy local" to a whole new level by creating their own currency. The BerkShare is now accepted by some 400 businesses throughout that region. Economics correspondent Paul Solmon explores advantages for both consumers and storefronts.2013-09-05 18:29:00disabledbP0iSnygyhUfalse139589139590http://www.pbs.org/newshour/bb/inside-new-pay-day-loan-rules-consumer-financial-protection-bureau/Inside the new pay day loan rules from the CFPBThis week, the federal Consumer Financial Protection Bureau took new steps to protect the working poor from people critics describe as predatory lenders, those who make what are known as pay day loans. Chico Harlan of the Washington Post joins Hari Sreenivasan to discuss the changes.2015-03-29 00:00:00http://www.pbs.org/newshour/wp-content/uploads/2015/03/payday1-320x196.jpg2365453521Z5Ib1bTn2-w139285139298http://www.pbs.org/newshour/bb/investors-pumping-another-housing-bubble-florida/Are investors pumping up another housing bubble in Florida?Since Florida's housing market crashed nearly a decade ago, a wave of investors offering cash to flip or rent properties has helped restore market values. Now, some homeowners who suffered foreclosure but are ready again to qualify are being priced out while rental prices rise, adding to concerns about another housing bubble. Economics correspondent Paul Solman reports.2015-03-26 18:00:00http://www.pbs.org/newshour/wp-content/uploads/2015/03/makingsense1-320x196.jpg2365451919-NYIpYgPqss138799138795http://www.pbs.org/newshour/bb/swings-currency-market-stock-prices-cap-wall-streets-chaotic-week/Swings in currency, stocks cap Wall Street's chaotic weekIt was a topsy turvy week in the markets, with huge swings in the currency markets and, by week's end, another sharp rise in stock prices. The Dow and S&P closed Friday just below their all-time highs. Michael Regan of Bloomberg News joins Hari Sreenivasan for more insight into the forces at work.2015-03-21 00:00:00http://www.pbs.org/newshour/wp-content/uploads/2015/03/stocks-320x196.jpg2365448289mxTvddNm2V0

Berkshire County in Massachusetts has taken "buy local" to a whole new level by creating their own currency. The BerkShare is now accepted by some 400 businesses throughout that region. Economics correspondent Paul Solman explores advantages for both consumers and storefronts.

Economics correspondent Paul Solman visits one New England county that prints its own money.

It’s part of his ongoing reporting Making Sense of financial news.

PAUL SOLMAN: The Berkshire Mountains of Western Massachusetts, home to the historic Red Lion Inn in Stockbridge, operating continuously since 1773, back when the tab might have been settled with newly minted so- called Continentals, revolutionary currency; 240 years later, I can pay by United States dollar, of course, or credit card.

PAUL SOLMAN: BerkShares, an alternative, small-is-beautiful local currency born in 2006 and now accepted by some 400 businesses in Berkshire County.

The process begins at five area banks, one conveniently right next door to the Red Lion Inn. Among them, the banks have about a million BerkShares in their vaults, circulated only when someone like me steps up to the window.

Can I trade dollars for BerkShares here, just no questions asked?

No fuss, no muss, and you buy BerkShares at a 5 percent discount, getting 105 BerkShares for every $100.

Seven hundred.

For my $700, to cover our crew costs for several nights at the inn, 735 BerkShares.

I’m back.

WOMAN: Hi.

PAUL SOLMAN: Hey, with BerkShares.

And, thus, you get a discount at every place that accepts the local currency, because at the bank, it takes 105 BerkShares to buy back $100.

The main purpose, then:

BRIAN BUTTERWORTH, Red Lion Inn: BerkShares is just a way to keep money within the community.

BRIAN BUTTERWORTH: We don’t make money off of it or lose money off of it.

PAUL SOLMAN: But wait a second. I just got a 5 percent discount. That’s not good for the Red Lion Inn, is it?

BRIAN BUTTERWORTH: We take your BerkShares at the same value as U.S. dollars, and we spend them as U.S. dollars. And it stays in our community, because there’s a geographical limit to where you can redeem BerkShares.

PAUL SOLMAN: And in keeping with the small-is-beautiful philosophy, the limit is about 10 miles outside Berkshire County’s borders.

ALICE MAGGIO, Schumacher Center for New Economics: But we don’t enforce who can take BerkShares and who can’t.

PAUL SOLMAN: Alice Maggio runs the BerkShares program out of the Schumacher Center for New Economics in Great Barrington. E.f. Schumacher was the author of small is beautiful. But Maggio admits small can also be parochial.

ALICE MAGGIO: You can see local currencies as isolationist and secessionist.

PAUL SOLMAN: Protectionist?

ALICE MAGGIO: Or protectionist.

PAUL SOLMAN: But she hardly thinks BerkShares represent a threat to global trade.

ALICE MAGGIO: We used to have this system in this country. We used to have local currencies everywhere.

PAUL SOLMAN: Yes.

ALICE MAGGIO: That’s what we’d like to see again, is this regional currencies that work for their region and then a national currency. Why not?

PAUL SOLMAN: In a remarkably apt application of the phrase think globally, act locally, there’s a mini-boom in local currencies worldwide, especially in Europe, the Chiemgauer in Southern Germany, in France, the Basque Eusko, and Toulouse Sol-Violette, the Bristol Pound and the Brixton Pound in the U.K.

But, while thinking globally, we too were acting locally, and thus more interested in the currency of Berkshire county. So, Alice Maggio took us for a tour of our options, first stop, The Magic Fluke, a local ukulele manufacturer.

ALICE MAGGIO: Hello.

PHYLLIS WEBB, The Magic Fluke Company: We make a great solid-body ukulele, where we actually took the trees down and kiln-dried the wood.

PAUL SOLMAN: Co-owner Phyllis Webb, a woman some might describe as from an earlier era.

PHYLLIS WEBB: Right here in Sheffield, we have been able to find some wood for our fretboard, and in our new violin, we will be using an injection molder right here in Pittsfield, so not far away.

PAUL SOLMAN: Ideally, The Magic Fluke pays in BerkShares for the parts to make its instruments.

PHYLLIS WEBB: We do sell all over the world, but we hire local people. It’s good for our country to keep manufacturing here. It’s about community support. It’s about shopping local. It’s about sustainability right here where we live and where we work.

PAUL SOLMAN: Now, the Berkshires are known for a certain kind of lifestyle, which attracts what you might call cosmopolitan locals.

JEAN FRANCOIS BIZALION, Bizalion’s Fine Food: I came on a July 4 weekend 25 years ago and fell in love with the area. And it took me 10 years to move here full-time.

This is Francois. How are you?

PAUL SOLMAN: Jean Francois Bizalion, a native of Arles in the South of France, used to be a fashion editor, now runs his own gourmet shop in Great Barrington.

JEAN FRANCOIS BIZALION: We take BerkShares from our customers when they purchase food or items off the shelf, and we also pay some of the vendors locally with our BerkShares.

PAUL SOLMAN: So, is it more a political act on your part or a self-interested act, in the sense that you will get more business if there are more people circulating or owning BerkShares?

JEAN FRANCOIS BIZALION: It’s a bit of both. We’re trying to encourage local industries and possibly put a stop to big formula stores who might be coming in and not having the same effects when they do business here as a small enterprise would. So, in that sense, it is political.

PAUL SOLMAN: I assume you mean liberal political, or sort of left-wing political. That fair?

BRIAN BUTTERWORTH: It — also a conservative appeal as well, because of some concerns with the money system as it is right now in the United States.

PAUL SOLMAN: Tom’s Toys also fails to fit the stereotype.

Anything that’s made locally?

TOM LEVIN, Tom’s Toys: Local New England local or USA, but not in Great Barrington or Berkshire County, no.

PAUL SOLMAN: In fact, most of the toys Tom Levin showed me for my grandkids, like most toys everywhere, were, yes, made in China.

Still, Levin sees himself as doing his part to save Main Street for tourists and locals alike.

Is BerkShares the answer to the threat to retail from the Internet and chain stores?

TOM LEVIN: I would say it’s part of the answer. The answer is also to create awareness among people that, if they shop online, 100 percent of what they spend goes into the same cyberspace that they’re sending their order. If they shop at a big box store, 65 percent of what they spend leaves the community.

PAUL SOLMAN: But, in the end, do consumers really care? Legend has it the very first BerkShare transaction took place across this counter at Rubi’s Coffee shop. Owner Matt Rubiner says the BerkShare movement was something of a fad at first. Then:

MATT RUBINER, Rubi’s Coffee & Sandwiches: It went through kind of a fallow time, but now we’re beginning to see more and more.

PAUL SOLMAN: And Alice Maggio is working hard to add even more businesses, is eying a scheme to issue more BerkShares as so-called productive loans to local businesses by fronting them the currency to start up or expand.

Ultimately, she also hopes to untie BerkShares from the U.S. dollar.

ALICE MAGGIO: That is our goal, is to create a currency that holds its value, as opposed to a currency like the dollar that’s inflating constantly. So, and at that point, people will want to use BerkShares.

PAUL SOLMAN: And for folks in places like Berkshire Country, under the cloud of both de-industrialization and globalization for decades now, the hope is that here comes the sun once more.

PBS NewsHour allows open commenting for all registered users, and encourages discussion amongst you, our audience. However, if a commenter violates our terms of use or abuses the commenting forum, their comment may go into moderation or be removed entirely. We reserve the right to remove posts that do not follow these basic guidelines: comments must be relevant to the topic of the post; may not include profanity, personal attacks or hate speech; may not promote a business or raise money; may not be spam. Anything you post should be your own work. The PBS NewsHour reserves the right to read on the air and/or publish on its website or in any medium now known or unknown the comments or emails that we receive. By submitting comments, you agree to the PBS Terms of Use and Privacy Policy, which include more details.